Inaugurating the ‘Laksiyane Mandiraya’ Administrative Complex in Gampaha, President Ranil Wickremesinghe provided reassurance that the restructuring of domestic debt in Sri Lanka would not have any adverse effects on public funds, including the Employees’ Provident Fund (EPF). He emphasized that the rate of return for superannuation funds would remain unaffected by the debt restructuring measures.
Addressing concerns about the stability of the country’s banking system, President Wickremesinghe affirmed that both public and private banks would remain unthreatened by the restructuring of domestic debt. He specifically mentioned that the deposits of over 50 million bank depositors would not be impacted, and there would be no changes to the current interest rates offered on bank deposits.
To expedite the debt restructuring process, proposals for both foreign and domestic debt restructuring will be presented to the Cabinet on the same day as the inauguration of the complex.
The President highlighted the urgency of restructuring Sri Lanka’s debt, as failure to do so would result in the public debt surpassing 100% of the Gross Domestic Product (GDP) by 2035. He also mentioned that foreign creditors have expressed their agreement to participate in the debt restructuring process.
President Wickremesinghe stressed the importance of restructuring both external and domestic debt to ensure debt sustainability in Sri Lanka. He acknowledged the burden carried by foreign creditors, noting that the country is expected to receive 17 billion US dollars from them over the next five years. The President also emphasized the need for local creditors to contribute to the debt restructuring efforts.
The proposed debt restructuring plan aims to safeguard public bank deposits and protect the depositors of all banks regulated by the Central Bank. President Wickremesinghe assured that the proposed method of domestic debt restructuring poses no harm to bank depositors and will not lead to a collapse of the banking system. On the contrary, it will pave the way for a restructuring process that can rebuild the economy.
The President highlighted his discussions with international figures during his visit to France, including Commonwealth Secretary General Patricia Scotland, IMF Managing Director Kristalina Georgieva, Netherlands Deputy Prime Minister and Finance Minister Sigrid Kaag, US Treasury Secretary Janet Yellen, and Japanese Foreign Minister Yoshimasa Hayashi. They expressed their commitment to assisting Sri Lanka in its economic recovery and debt restructuring.
President Wickremesinghe also mentioned his telephone conversation with Indian Finance Minister Nirmala Sitharaman, who expressed India’s intention to positively contribute to Sri Lanka’s debt restructuring and economic stability. Detailed discussions on the matter are expected to take place during the President’s upcoming visit to India.
Additionally, Foreign Minister Ali Sabri’s visit to China aimed to enhance bilateral relations and strengthen economic ties between the two countries. Minister Sabri held fruitful discussions with China’s Foreign Minister, Mr. Qin Gang, focusing on deepening cooperation.
During the visit, President Wickremesinghe met with the Chinese Finance Minister, Liu Kun, in Beijing, where he was briefed on China’s economic stabilization and progress plan. China’s Exim Bank Chairman, Wu Fulin, and other officials appointed for the purpose of restructuring Sri Lanka’s foreign debt, expressed their commitment to contributing to the debt restructuring process.
The inauguration of the Administrative Complex was attended by Prime Minister Dinesh Gunawardena, several ministers and state ministers, Gampaha District Development Committee Chairman, Members of Parliament, and other dignitaries.